The use of cryptocurrency by scammers has grown over five times according to the Federal Trade Commission (FTC) with losses to consumers from $130 million in 2020 to $680 million in 2021. And for the first quarter of 2022, losses amounted to $329 million. The median loss to crypto fraud is $2,600, compared to $1,000 across all fraud types.
Pig butchering refers to fattening up the pig for the
kill and is used by romance scammers to refer to their process of developing scripts
that promise romance and riches through social media to lure potential victims
for their romance scams. The FBI in Oregon recently alerted the public to Chinese
romance scammers who started operations in China and migrated to U.S. victims. The
scammers use dating apps and other social media to find their victims.
The scammers will groom their target and eventually
try to move communications off the dating app or website to WhatsApp or email.
After some time, typical romance scammers come up with
a seemingly compelling reason that they need money. A new trend is for scammers
to suggest that “investing” in a cryptocurrency would make the target rich. The
scammer might say that they have been investing and they, naturally, would be
happy to help the target.
The scammer will suggest setting up a cryptocurrency
account and may provide a web link to an official looking cryptocurrency
website to learn more about cryptocurrency investing. The website looks
legitimate but, of course, is controlled by the scammer. Any money invested through
the site will eventually go to the pocket of the scammer.
Scammers who use other techniques, such as employment scams,
extortion scams, imposter scams, are demanding payment in cryptocurrency. In
the past, the favorite mode of payment has been with gift cards. Like with gift
cards, once the scammer has the funds, they are gone. And there is no way to get
your money back. Cryptocurrency is not regulated so you do not have a bank to
go to, to reverse the transaction.
Scammers are always looking for new ways to take your
money. Cryptocurrency offers a unique opportunity for scammers. It is new, mysterious,
complicated, unregulated, and has received publicity recently. Many people have
tried to “invest” in cryptocurrency as a legitimate investment rather than just
use it to pay for a good or a service. Enticing a target into investing in
something that is exotic and that the target does not understand gives the
scammer all of the advantage.
The following links give more detail on cryptocurrency
scams and cryptocurrency:
Krebs on Security:
https://krebsonsecurity.com/2022/07/massive-losses-define-epidemic-of-pig-butchering/
FBI:
AARP:
https://www.aarp.org/money/scams-fraud/info-2022/cryptocurrency-schemes-ftc.html
Federal Trade Commission:
https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams#scams
Better Business Bureau:
https://www.bbb.org/all/scamstudies/cryptocurrency_scams/cryptocurrency_scams_study
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